Christmas Bonuses Q&A

February 1, 2000

Originally appeared in the February, 2000 edition of Georgia's Cities.

We have heard about controversy over Christmas bonuses for city employees. What can we do to keep the Grinch from stealing Christmas in the year 2000?

Christmas 1999 was tough for some city employees in Gwinnett County. Controversy erupted over the practice of providing Christmas bonuses to employees. Provision of extra compensation to employees at Christmas time is a long-standing tradition in America. Recognizing employees of the public sector, however, requires a bit more planning and careful structuring to assure that the money provided is done so in a legal manner.

The Georgia Constitution prohibits "gratuities". Gratuities are gifts from the public treasury to private individuals. Paying someone for work performed is not a gratuity. Compensation for services rendered can include not only salary but also other items of values such as health benefits and the promise of retirement benefits. Thus, one option for addressing the Christmas "bonus" "reward" issue is to carefully structure the payments as part of the salary of the employee. Procedurally the cost of the payments could be made part of the personnel line item of the city budget.

Some governments provide "longevity" increases as part of their normal compensation package. An example of the longevity payment would be an employee who receives a one-time payment of 1 percent of their salary on the employee's anniversary date for all employees who have been employed for a specified number of years in the government. A way to strengthen the tie between the payment and compensation is to base the amount paid on longevity. For example, perhaps the additional compensation at Christmastime could be $25 for persons employed less than one year, $50 for persons employed 1-5 years, etc.

On December 25, 2000, Georgia cities who wish to provide increased compensation to their employees can do so, however, planning for this benefit and consultation with legal counsel should start immediately.